Election: PM promises subsidies for low-income first-home buyers

Election: PM promises subsidies for low-income first-home buyers

Prime Minister Scott Morrison has promised up to $500 million in subsidies to help low-income first-home buyers ahead of the federal election this coming Saturday.

A Liberal-National Coalition Government would offer guarantees to reduce the required deposit for first-home buyers to 5% of the purchase price, instead of 20%, Mr Morrison announced at the Liberal Party’s campaign launch in Melbourne on Sunday.

Singles earning up to $125,000 and couples with a combined income of up to $200,000 per year would be eligible for the guarantees provided through the National Housing Finance and Investment Corporation.

“It can take up to 10 years for an average household to save a deposit,” Mr Morrison said in a statement. “We want to help Australians realise the goal of buying their first home by cutting years off the time it takes to save up.”

The First Home Loan Deposit Scheme will commence on 1 January 2020 if the Coalition is reelected, and would prioritise loans from smaller lender to encourage competition.

However, the scheme may not be available for all homes, with the Liberal Party’s policy implying there may be caps on the value of the property.

“The value of homes that can be purchased under the scheme will be determined on a regional basis, reflecting the different property markets across Australia,” the Liberal Party’s website says.

The Labor Party opposition, which is leading in the polls, has announced it will match the Government’s plan, alongside its preexisting policy of scrapping negative gearing.

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